Regulatory Compliance

Trusaic's Penalty
Reduction Service

Our service will avoid or significantly reduce IRS penalty assessments.

The IRS is serious about enforcement of the Affordable Care Act and has been issuing penalty notices ranging from hundreds to millions of dollars.

With only one 30-day extension for each IRS penalty notice received in the ACA penalty process, employers need to act with even more urgency in responding to a penalty notice.

That’s why we recommend undergoing an ACA Penalty Risk Assessment. Learn your potential penalty exposure, minimize the risk of receiving one, and better prepare yourself for responding in the event you receive one.

Currently, the following ACA penalty notices are being issued by the IRS.

Contact us to review your options today.

Letter 226J: This ACA penalty notice is sent by the IRS to employers identified as having failed to comply with the ACA Employer Mandate, which requires employers with 50 or more full-time employees and full-time equivalent employees to offer minimum essential coverage to at least 95% of their full-time workforce (and their dependents) whereby such coverage meets minimum value and is affordable for the employee. The IRS is currently issuing Letter 226J for the 2017 tax year.


Letter 5005A: This penalty notice is sent to employers who did not file their ACA forms 1094-C and 1095-C with the federal tax agency under IRC Section 6721 and/or failed to distribute Form 1095-C to employees under IRC Section 6722. IRS staff believes that many employers have not made ACA filings for the 2015, 2016 and 2017 tax years.


Letter 972CG: This penalty notice is being sent to employers who filed their annual ACA information, but did so after the IRS deadlines established in IRC Section 6721.


Letter 5699: This IRS notice is sent as a precursor to issuing ACA penalty assessments. Employers are sent Letter 5699 to determine if they have failed to file or distribute their ACA information returns as required. In this notice, the IRS asks employers to confirm the name they used when filing ACA information returns, provide the Employer Identification Number (EIN) submitted, and the date the filing was made. It appears that the agency is determining if penalty assessments are warranted for certain employers by cross referencing the number of W-2s filed with the IRS with their 1094-C and 1095-C forms. If this information is not consistent, it will lead to the IRS issuing the employer a penalty notice. Responding to Letter 5699 is crucial if you have already filed ACA information returns with the IRS because the information provided should have prevented your organization from receiving an ACA penalty notice.

If your organization has already received any of these notices – it’s not too late.

Our extensive ACA knowledge, coupled with expertise in extracting, aggregating, consolidating, cleaning, and validating data, provides solutions you can trust will be done and one right.

For penalties Letter 226J penalty notices, your organization will undergo one of two phases:

Phase I
We review the accuracy of the client’s methodology for relevant ACA filings to determine if there is substantial information and documentation that can be provided to the IRS to effectively reduce or eliminate the proposed penalty assessment. Trusaic will prepare a response package, submit the response to the IRS and handle any related requests or inquiries from the IRS.

Phase II
We perform a comprehensive redetermination of the ACA information to minimize and or eliminate the proposed IRS penalty assessment. This service includes submitting a response package, including explanation and relevant documentation to the IRS, and handling any additional requests or inquiries from the IRS. It also includes obtaining and analyzing historical data in order to accurately apply the appropriate IRS measurement method and performing Aggregated Employer Group Analysis, if required.

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We can also remediate and eliminate proposed penalties assessed in IRS Letters 5005A, 972CG and 5699.

Our ACA Specialists will calculate the correct number of full-time employees for the applicable tax year and generate correct 1094-C / 1095-C schedules to challenge the IRS penalty assessment.

If you haven’t yet received an IRS penalty assessment, you have nothing to lose in undergoing an ACA Penalty Risk Assessment. Confirm your ACA compliance or discover your potential penalty exposure and take action.

Our ACA Penalty Reduction Service is a solution that payroll and software vendors don’t provide.

Trusaic works with employers directly or in concert with their insurance brokers, CPAs or law firms.

Contact us to review your options.